The U.S. Securities and Exchange Commission on Tuesday sued Elon Musk for failing to timely disclose that he bought more than 5% of Twitter stock in 2022, before he took over the social media company.
The lawsuit, filed in federal court in Washington, accuses Musk, who was selected by President Trump to co-direct the so-called Department of Government Efficiency, of violating federal securities laws by delaying disclosure. .
The case highlighted long-standing tensions between Musk and the U.S. government, who supported President-elect Donald Trump. The eccentric billionaire has clashed with the SEC before. False and misleading statements He had been posting on Twitter about taking his other company, Tesla, private.
Under federal law, Musk was required to disclose his Twitter stock in March 2022, 10 days after he acquired more than 5% of the company’s stock, according to the complaint.
Instead, Musk took Twitter stock public in April 2022, 11 days after the regulatory deadline. By then, the billionaire had bought more than 9% of Twitter’s stock. Following Musk’s revelations, Twitter’s stock price soared more than 27% from the previous day’s closing price.
“As a result, Mr. Musk was able to continue purchasing stock at artificially low prices and underpaid at least $150 million for stock purchased after the deadline to file beneficial ownership reports. “,” the complaint states.
The SEC alleges that the move also harmed investors who didn’t know about Musk’s stock and ended up selling their Twitter shares at lower prices.
Musk’s lawyer, Alex Spiro, said in a statement: Mr. Musk did nothing wrong and everyone recognizes this fraud for what it is. He accused the SEC of conducting a “multi-year campaign of harassment” against the billionaire, which “culminated in the filing of a single-count ticky-tack complaint” against him.
SEC Chairman Gary Gensler will resign on January 20, the day President Trump is inaugurated. President Trump announced in December that he would nominate crypto advocate Paul Atkins to lead the securities regulator.
Musk’s large stake in Twitter was an early sign that he might buy the company in 2022, as it struggles to win advertising dollars and compete with big social networks like Facebook. .
He completed his acquisition of Twitter in October 2022 after trying to exit his $44 billion acquisition of the social media company. Musk, who renamed Twitter to X and took the company private, said he bought the platform to promote free speech.
